The Three Things That Got Fab.com Two Million Users In Seven Months

Fab.com has burst on to the e-commerce scene and it's still growing like crazy. Founded in February of 2010 as a gay social network, it pivoted to a high-end flash sales site last year and is now making a big impact in the industry.

"Our virtual products and physical products must delight every day," said Bakali. There's no skimping on product, because in the end, that's what the consumer wants.

That means providing value to customers, not only with the end product that they receive from a purchase, but in the use of the website as well.

2) Social media

"Fab was made to be social," said Bakali. There's a calendar on the site that lets people see what's going on sale ahead of time, and on the day of a sale, people usually start posting on Facebook about it without needing a prompt. Someone out there tweets about Fab around once every 30 seconds, said Bakali.

Sometimes, Fab does promote launches itself. Bakali used the example of the Beardo -- a quirky product that's essentially a bearded beanie which turned out to be a huge success.

Fab started recruiting members in March to prepare for the June launch, said Bakali. "To capitalize on that excitement, we encourage them to invite their friends and earn credits, and come and engage with the site."

3) Strategic advertising

Fab doesn't have the resources to carpet bomb the nation with advertising, but it also can't rely on social media for everything. So, it has to target its marketing as specifically as it can, to get the most benefit out of it. Or, as Bakali said, "feed the funnel."

"When we launched and had those 175,000 members, 50,000 of them came there via ads," said Bakali. These are the early adopters and influencers who feed "the pinwheel," and attract their friends, growing Fab's membership.

And by advertising, Fab can target brand new communities that it thinks will like its offering -- which is harder to do purely with social media -- and hopefully add them to the mix.